Germany–U.S. · Home Office & Remote Work
Remote Work Between Germany and the United States
What tax, payroll, social-security and permanent-establishment issues arise when an employee of an employer in one country works temporarily or permanently from the other country? For remote work, the actual physical place of work is generally the starting point.
Cross-Border Home Office
The Place of Work Moves — the Employer Does Not Automatically Move With It
Remote work often separates the employer country, residence country and actual work country. Under Article 15 of the Germany–U.S. tax treaty, the taxation of employment income generally follows the country in which the employee physically performs the services.
For example, if an employee living in Germany works permanently from a German home office for a U.S. employer, those workdays are generally attributable to Germany. German wage-tax, social-security and employment-law obligations may also arise for the U.S. employer.
Conversely, workdays physically performed in the United States by an employee of a German employer can trigger U.S. tax and payroll issues. For short stays, the treaty's 183-day exception must also be analyzed.
Employment Income
Article 15 Follows the Actual Place of Work
Home Office in Germany
Work physically performed in Germany is generally German work-country income, regardless of whether the employer is based in the United States.
Remote Work From the United States
Work physically performed in the United States can be taxable there. For short-term work, the 183-day exception must be tested separately.
Hybrid Work in Both Countries
Where an employee regularly works in Germany and the United States, employment income is generally allocated based on actual workdays.
183-Day Rule
Short-Term Remote Work in the Other Country Can Receive Treaty Relief
If a German resident temporarily works in the United States, the United States may generally tax the employment income as the work country. The taxing right remains exclusively with Germany, however, if all requirements of Article 15(2) are met.
Under the Germany–U.S. treaty, the presence threshold is measured by reference to the calendar year concerned.
- no more than 183 presence days in the United States in the calendar year concerned
- the employer is not resident in the United States
- the compensation is not borne by a U.S. permanent establishment
- all requirements must be satisfied simultaneously
- workations and traditional assignments are therefore not automatically tax-free
Payroll & Employer Obligations
A Foreign Employer Can Acquire Obligations in the Employee's Residence and Work Country
U.S. Employer With Employee in Germany
If an employee works permanently in Germany, it must be determined whether the U.S. employer has German wage-tax and social-security obligations or whether other local registration and payroll measures are required.
German Employer With Employee in the U.S.
Long-term or recurring U.S. work can create federal, state and local payroll obligations. The analysis is not limited to federal income tax.
State Tax
The Germany–U.S. income-tax treaty does not automatically bind U.S. states. Remote work in the United States therefore requires a separate state-level analysis.
Payroll Does Not Always Follow the Final Tax Result
Wage-tax or withholding obligations can differ from the final income-tax liability. No withholding does not automatically mean no tax liability — and withholding does not necessarily determine the final treaty result.
Remote Work vs. Assignment
Not Every Home-Office Arrangement Is an Assignment
Employer Temporarily Sends the Employee Abroad
A classic assignment generally involves an existing employment relationship and a temporary posting to the other country. In that case, the five-year rule under the Social Security Agreement may apply.
Employee Moves on Their Own Initiative
If an employee permanently relocates to the other country and continues working from there, the assignment rule does not automatically apply. Social security and employer obligations must be reassessed.
Local Hire
If a person is hired directly in Germany by a U.S. employer, the German system generally applies under the Social Security Agreement. Correspondingly, a local hire in the United States is generally covered by the U.S. system.
Workation
Short-term voluntary work from the other country can trigger tax, social-security and employment-law rules differently. There is no universal “30-day” or “183-day” exemption across all areas of law.
Permanent Establishment
Ordinary Employee Home Office Generally Does Not Create a German Permanent Establishment
Under German administrative practice, ordinary employee activity from a private home office generally does not create a permanent establishment of the foreign employer. One key reason is that the employer typically does not have sufficient power of disposal over the employee's private premises.
This may generally remain the case even if the employer reimburses costs, provides equipment or does not provide another workplace. The result can differ where the employer can actually dispose of the premises or where special management or agency functions are performed from the home office.
German administrative guidance published in 2026 also reflects the OECD approach for treaty purposes: use of a private home office for less than 50% of the employee's total working time for the relevant employer generally does not result in a treaty permanent establishment attributable to that employer from a German application-state perspective.
Special Business Risks
For Senior Employees, the Home-Office Analysis Alone Is Not Enough
Fixed-Place PE
Power of disposal, permanence and actual use of the premises must be reviewed.
Dependent-Agent PE
An employee who regularly concludes contracts or plays the principal role leading to their conclusion can create separate permanent-establishment risks.
Place of Management
If key business decisions are made permanently from the home office, significantly broader corporate-residence questions can arise.
Typical Situations
Germany–U.S. Remote Work in Practice
U.S. Employer, Permanent Residence in Germany
German work-country income, possible German payroll, German social security and business obligations of the U.S. employer must be reviewed.
German Employer, U.S. Residence
U.S. federal and state tax, payroll and U.S. Social Security may become relevant; whether a classic German assignment exists must be analyzed separately.
Three-Month Workation in the U.S.
Article 15(2) may prevent U.S. federal taxation if all requirements are met. State tax and social security still require separate analysis.
Hybrid: 3 Days Germany, 2 Days U.S.
Employment income generally needs to be allocated based on actual workdays. Social security and payroll may require additional coordination.
U.S. Sales Executive Working From Germany
In addition to German wage tax and social security, dependent-agent PE, contract authority and place-of-management issues may become relevant.
U.S. Citizen Working Remotely From Germany
Germany taxes German work-country income; U.S. worldwide taxation generally continues and must be coordinated through foreign tax credits and other U.S. rules.
Related Guidance
Related Topics
Frequently Asked Questions
Remote Work Germany–U.S.
Where is my salary taxed if I work remotely in Germany for a U.S. company?
Can I work from the United States for 183 days without tax?
Does my German home office create a permanent establishment for my U.S. employer?
Which social-security system applies to permanent remote work?
Does the Germany–U.S. tax treaty also apply to U.S. state tax?
Germany–U.S. Tax Advice
Do You or Your Employees Work Remotely Between Germany and the United States?
We analyze employment income and workdays, the 183-day rule, German and U.S. payroll, social-security coverage, Certificates of Coverage and potential permanent-establishment and employer risks.
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Social Security
As a Starting Point, the System of the Country Where the Work Is Performed Applies
The Germany–U.S. Social Security Agreement generally follows the territorial principle: a person working in Germany is generally covered by the German system, while a person working in the United States is generally covered by the U.S. system.
An important exception applies to a genuine temporary assignment. If an employee is sent to the other country within an existing employment relationship and the assignment is expected not to exceed five years, home-country coverage may generally continue.